Producing Liquid Fuels from Coal David Gray Presented at the National Research Council Board on Energy and Environmental Systems Workshop on Trends in Oil Supply and Demand 20-21 October 2005, Washington DC
2 Disclaimer THIS PRESENTATION REPRESENTS THE VIEWS OF THE AUTHOR AND NOT NECESSARILY THOSE OF MITRETEK SYSTEMS OR ANY AGENCY OF THE UNITED STATES (U.S.) GOVERNMENT. THE AUTHOR DOES NOT MAKE ANY WARRANTY, EXPRESSED OR IMPLIED, NOR ASSUMES ANY LEGAL LIABILITY OR RESPONSIBILITY FOR THE ACCURACY, COMPLETENESS, OR USEFULNESS OF ANY INFORMATION CONTAINED THEREIN.
3 Presentation Content What is CTL: History and Current Status Why CTL and what are the barriers Overview of technology General ROM economics CTL products Worldwide CTL Potential GHG issues Benefits and next steps
4 What is CTL? Direct Coal Liquefaction Bergius 1900 Many demo and pilot projects in 70 s and 80 s Shenhua Project in China (HTI/Headwaters/Axens) Indirect Liquefaction Fischer-Tropsch 1920 s Sasol 1 1950 s Sasols 2 & 3 1980 s Feasibility studies in China
5 GTL & CTL: Current Status Gas to Liquids (GTL) is commercial Approximately $25,000/bbl construction cost Natural gas at $0.50-$1.0/ MM Btus RSP ~ $20-25/BBL Exxon-Mobil, Shell and Sasol plants planned in Qatar and Nigeria Coal to Liquids (CTL) technology Sasol 150,000 BPD FT plants in South Africa (last plant built in 1980) China Shenhua Sasol feasibility studies for 2 large FT plants China Shenhua direct liquefaction plant No large scale integrated plants built with advanced technology
6 Why CTL? Energy Security: Large domestic coal resource (250 years supply) could increase domestic transportation fuel production and reduce oil imports Advances have been made in Gasification through IGCC & chemicals deployment Advances made in FT Synthesis step through GTL deployment Fuels produced are like GTL liquids and are compatible with existing liquid fuels infrastructure Fuels are essentially refined products and no additional refining capacity is necessary
7 Barriers to CTL Technical: Integrated operations of advanced CTL technologies have never been demonstrated Economic: Uncertainties about future WOP High Capital and operations costs Investment risks Environmental: CO 2 and criteria pollutants emissions Expansion of coal production Commercial Deployment: Competition for critical process equipment and engineering skills Who would take the lead in commercial deployment? Part power part liquid fuels Social: NIMBY & Public resistance to coal use
Fischer-Tropsch Technology: Overview 8 Natural Gas Coal Pet Coke Biomass Wastes Air Synthesis Gas Production Gasification Reforming Steam POX ATR Oxygen Plant O 2 F-T Liquid Synthesis Slurry/Fixed/ Fluid Bed Liquid Fuels Product Recovery Wax Wax Hydrocracking Tail Gas H 2 Liquids Power Generation Hydrogen Recovery Product Storage Naphtha/ Diesel
9 Polygeneration Concept CTL plant configured to produce electric power and liquid fuels can readily be modified to a FutureGen-type plant producing hydrogen. Coal Coal Gasification Oxygen Gas Cleaning Synthesis Liquid Fuels Methanol Chemicals Air ASU CO 2 Removal CO 2 to Storage/EOR Shift Gas Turbine Hydrogen PSA HRSG Power Gas Turbine
Generic ROM CTL Economics: Sub-bituminous Coal 10 Capital Size CRF Capacity Coal Cost Efficiency Coal BTU FT MMBTU/B BFT/Ton Plant Capital Bituminous Capital O&M Coal Annual Review Required NAP Credit Power Credit RSP Diesel Premium RSP (COE) Annual Coal Input 75,000 120,000 0.12 330 5 0.49 8,516 5.264 1.59 $1,080 450 125 $1,655 $238 $3.80 $1,413 $44.62 $9.10 $35.52 $24,978,000 $/DB BPD DPA $/T BTU/# $9,000/MM TPA
11 General Economics 60 50 RSP $/BBL COE 40 30 BITUMINOUS SUBBITUMINOUS 20 50 60 70 80 90 Thousands CAPITAL $/DB
12 FT Products Ultra clean zero sulfur liquid fuels Fungible with current infrastructure Diesel fraction has high cetane number Naphtha low octane but excellent cracker feed & HCCI fuel Waxes can be hydroisomerized to high quality lubes Clean burning compared to petroleum fuels
13 Worldwide CTL Potential? 5 35 4 CTL PRODUCTION MMBPD Millions 3 2 1 0 0 0 0 0 1 1 1 1 2 2 2 3 3 4 4 5 6 7 9 11 14 17 21 25 30 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 YEAR
What Would a Large CTL Plant Look Like? 14 Carbon Dioxide Compression CO 2 CO 2 CO 2 to Storage 16,100 TPD Coal 49,200 TPD 31365 TPD Carbon Coal Prep Air Coal Gasification Oxygen Air Separation Synthesis Gas Cleaning/ Conditioning Acid Gas Sulfur Recovery Fischer Tropsch Synthesis Power Generation CO 2 1790 TPD Stack Power Product Recovery and Upgrading LPG NAPHTHA Diesel 120,000 BPD 13,467 TPD Carbon Sulfur Off-Sites
GHG Issues: Approximate CO2 Emissions 15 Petroleum 248# carbon per barrel = 6#/gal = 0.81#CO2/mile CTL (90% capture) 1 Bbl FT = 233# C = 543# coal C C not in product = 310# C emitted = 31# Total C emitted = 31+233=264#=6.28#/gal =0.85#CO2/mile
16 Next Steps and What Else is Needed Commercial Scale Production The government could provide: (1) floor price guarantees for the products to ensure an acceptable rate of return for the project or (2) loan guarantees to allow private financing to be obtained under reasonable terms or (3) tax incentives such as investment tax credits, fuel excise tax exemptions or accelerated depreciation could be used. Concurrent with these activities the government could sponsor R&D to improve the technology performance and reduce costs.
17 Potential Benefits to U.S. Economy Establish domestic industry (jobs) Enhanced energy security by reducing oil imports Reduce balance of payments Clean domestic liquid fuel production (environment) Demonstrate CO2 recovery Electric power by product
18 Conclusions It will be necessary in the future to develop alternatives to conventional petroleum when world demand outstrips supply and GTL and CTL could be used as petroleum alternatives GTL and CTL produce ultra clean liquid fuels and would use existing transportation infrastructure. Cost of production of clean liquid fuels from coal is estimated to be in the range of $30-50/BBL COE depending on coal type and actual Capex. Continued high world oil prices above $50/BBL would make CTL an economically viable option in the U.S and worldwide. Countries with large coal reserves and little domestic petroleum are candidates for using CTL to provide fuels to supplement conventional petroleum (China, India, US, Australia) Continued R&D and GTL & CTL deployment will improve the economics nevertheless government incentives will probably be necessary for FOAK CTL plants to reduce risks for investors and thus accelerate commercial deployment.
19 Thought for the Future Coal Air Water Coal Conversion Complex Liquid Fuels Hydrogen Electric Power CO 2 for EOR/Storage